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Reasonable Adjustment or Unreasonable Pay Cut?

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19 October 2016

Reasonable Adjustment or Unreasonable Pay Cut?

Is a disabled employee’s pay protected when they are required to change to a lesser job role as a result of reasonable adjustment?

The EAT ruled that an employer has to protect an employee’s pay when a reasonable adjustment is required to counter disadvantage as a results of the employee’s disability. The ET and EAT laid out plausible arguments for including pay protection with a notable focus on reasonableness assessed by the employer’s ability to continue paying the higher rate of pay.

This was examined in G4S Cash Solution (Uk) Ltd v Powell UKEAT/0243/15/RN. Mr Powell was an employee at G4S Cash Solutions (UK) Ltd for over 10 years. He moved across multiple roles throughout his career at the company, but developed a worsening back problem and was recognised as disabled by mid-2012. His disability meant that he could no longer continue his role as ‘SLM engineer’, and he was moved to a lesser role of ‘key runner’ retaining the same rate of pay as his previous role. After one year, G4S looked to discontinue the role of key runner and consulted with Mr Powell other roles that he may consider. Nothing was available and G4S said that he could continue his work as key runner at the rate of pay for the job (around 10% reduction from SLM engineer), or would face dismissal. Mr Powell refused to accept a lower rate of pay and in October 2013 was subsequently dismissed. He claimed unfair dismissal and disability discrimination.

The Employment Tribunal found G4S to be in fault by failing to make the reasonable adjustment which was allowing Mr Powell to work as a key runner at the salary rate of a SLM engineer. They in essence, included pay protection as part of a reasonable adjustment. G4S claimed that to continue with the differing rate of pay would cause tension and discontent in the workplace. This argument was quickly disregarded by the ET who responded that they could express to any disgruntled workers that the salary difference was due to a lawful requirement to make reasonable adjustments for a disabled employee.

It was apparent that the ET was heavily influenced by G4S’s financial resources and size when determining whether the continuation of higher salary was reasonable. The ET failed to agree with the evidence provided by G4S that suggested that the higher salary was unfeasible. The Tribunal found that there was no evidence that retaining such salary would increase costs to the company that would majorly affect its finances. There may have been a suggestion by the ET that had G4S used their resources and discretion within HR to discuss a salary which may have been more fair, then an alternative rate marginally lower than the SLM engineer role may have been considered ‘reasonable’.

Conclusively, the ET found that the initial transfer of roles from SLM engineer to key runner with a retained salary fulfilled the duty to make reasonable adjustment. It was the fact a year on, that he would face a reduction in pay by virtue of transferred roles which created a disadvantage.

G4S appealed but the EAT agreed that there was no reason why protection of an employees pay should not be included when employers make reasonable adjustments. The EAT found that G4S were in strong financial position and could continue to pay. Whilst this decision seemingly places the stance of employees in a favourable position over their employers, it was noted by the EAT judge that such cases do not come to the tribunal regularly. It was further noted that any claims similar to that of Mr Powell’s are to be judged upon their own facts, with a close eye on financial considerations. The judge did not rule out the possibility of circumstances where financial adjustments will be unfeasible.

The finding here is that financial considerations are acceptable as long as they are valid, but employers should not try to suggest that reasonable adjustments may “cause tension and discontent”.

 

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